Private Sector Lender Axis Bank on Tuesday 11th August 2020 said that it raised ₹10,000 crores through allotment of equity shares to Qualified Institutional buyers (QIB) on August 10th at a price of 420.10 per share. The Shares were issued at a discount of 5 percent (i.e. 22.09 per equity share) to the Floor price of ₹442.19 per equity share aggregating to 10,000 crores.
Last week, the private sector lender Axis Bank had set a floor price of ₹442.19 per equity share for its proposed ₹15,000 crore qualifies institutional placement. Axis bank did not disclose the names of the Investors. The Bank said in a Statement that despite a challenging Macroeconomic environment the Placement has witnessed strong reception from global and domestic investor communities, including several large foreign portfolio Investors, domestic mutual funds and insurance companies.
The Board of the bank had last month approved plans to raise funds amounting to ₹15,000 crores. The QIP Plan (Qualified Institutional Placement) was approved by shareholders at the annual general meeting held on July 31, 2020. The Fundraise is expected to bolster the Bank’s capital position amid the covid-19 crisis that has forced lenders to set aside more provisions and cover against future bad loan shocks.
The bank’s total capital adequancy ratio under Basel three stood at 17.29% as on 30th June. The Chief Executive of the Bank Amitabh Choudhary, said that the bank has received great response from the global and the local investors alike. He further Reported that he believes that the bank is well-placed to leverage all possible growth opportunities that will come in as the economy opens up, and is in a strong position to combat the challenges that emanate from the covid-19 pandemic crisis.
Amitabh Choudhary also said that the bank already had the required capital to make provisions for the likely reverses amid the COVID-19 Pandemic and added that the new fund-raise places it at a comfortable level.
Chaudhary termed the Transaction as a “Confidence Capital” which signals that the bank can grow its balance sheet and support the economy, and allays all the possible concerns.
Other Banks which have raised capital or are in the process of raising capital include Kotak Mahindra Bank, ICICI Bank, Federal Bank and SBI.